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58% of homeowners are concerned about mortgage renewals, but more now have a plan: survey

Feb. 2, 2024
6 mins
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For mortgage holders, the roller coaster ride of mortgage interest rates continues. Many of the Canadians who locked into fixed mortgages when interest rates were historically low are now seeing the effect of Bank of Canada’s (BoC) ten interest rate hikes.

In the first six months of last year, the Canadian Mortgage and Housing Corporation (CMHC) estimated that 290,000 homeowners renewed their mortgage at a higher interest rate – 5.45% for a 5-year, fixed rate and 7.38% for a variable rate. And over the next two years, a further 2.2 million mortgages will be coming up for renewal at higher rates.

According to a Leger survey conducted on behalf of RATESDOTCA and BNN Bloomberg, over half of Canadian homeowners are concerned about their mortgage payments upon renewal — echoing the concerns felt in similar surveys conducted in July 2023 (62%) and October 2022 (53%).

Perhaps because of that, homeowners are continuing to make some hard financial decisions to compensate for these higher payments, either by decreasing discretionary spending or eating into their savings.

What's the damage? It depends on when you took out the mortgage

Three-fifths, or 58% of homeowners are concerned about increased mortgage payments when they renew. When compared to survey results from July 2023 (62%) and October 2022 (53%), the concern remains more or less the same. Those who are concerned about higher mortgage payments are likely to be in the age group of 18 to 34 (73%) and 35 to 54 (67%).

“Of course, people are concerned,” says Stephen Balgobind, a mortgage and insurance agent with Get Init! Financial Group.

“However, there’s a misnomer that as mortgage rates have doubled, people think their mortgage payments will be double.”

Thankfully, the situation is much less dire.

To illustrate, a study from Zoocasa found that in the GTA, those who took out a 5-year mortgage in 2020 can expect to see their monthly payments increase to $4,499 from the original $3,398 – that's a monthly increase of $1,101. However, those who took out a mortgage in 2018 can expect to see an increase of $257 on their average monthly payments.

“If you’ve paid down your mortgage over the last five years, the mortgage amount of $500,000 will probably have down a good $50,000,” Balgobind adds. “Now, if you do the math, you will probably be paying a little more when you renew at today’s rate.”

Related read: $23,579: This is how much more a variable-rate could have cost homeowners over fixed-rate

Homeowners who have created equity are more likely to be ‘not concerned’

On the flip side, 39% are not concerned about high mortgage payments. This matches similar trends reported in July 2023 (35%) and October 2022 (44%). It's also worth noting that the percentage of those who are not concerned at all about the increasing financial squeeze has increased from 17% in July 2023 to 21% now.

Among the respondents who stated that they are not concerned, 53% are likely to be older than 55, and more likely to be living in suburban and rural areas (43% and 44%). By comparison, only 32% of urban residents say they are not concerned.

“People who purchased homes more recently are the ones who are may be feeling the [pain of renewals] the most,” Balgobind says. “Those who purchased homes – perhaps a decade ago or someone from an older demographic – are in a good shape because they’ve created a lot of equity for themselves.”

Read more: Home equity in the age of a recession: How can it help?

CMHC reiterates that those who took out mortgages in 2020 will feel the pain of high mortgage payments the most.

“Most of these borrowers contracted their fixed-rate mortgages at record-low interest rates and most likely, at or near the peak of housing prices around 2020-2021,” the CMHC notes.

Rates were at a historic low of 1.64% in 2020, while the renewal rate is now 5.24%.

How Canadian homeowners are paying for higher mortgage payments

More than half (57%) of respondents have a plan to meet these additional expenses, which is consistent with the previous two surveys – 56% in 2023 and 52% in 2022.

Understandably, those who are concerned about higher mortgage payments are much more likely to have a plan when compared to those who are not (77% versus 30%) and they are more likely to be under the age of 55.

Of the respondents who have a plan, 39% plan on decreasing spending in other areas, 10% plan on using their savings, 5% plan on taking on debt, and a further 3% plan on selling their homes.

“People are really trying to pinch pennies where they can,” Balgobind says. “Some are trying to eat out less often and others are trying to cut down their phone or internet bills.”

It's not only mortgage payments burdening people’s finances, but also the rising cost of living that may be impacting these decisions.

“Life is [becoming] expensive. And finding the money for these things is becoming increasingly difficult,” he says.

Read more: 27% of Canadian holiday shoppers are spending less this year: survey

The percentage of respondents without a plan has declined by four percentage points this year, with 17% saying they don’t have a plan as compared to the 21% in July 2023. This could indicate that more people are feeling the pinch of inflation and high interest rates and are now planning for increased expenses.

Balgobind also notices an increasing trend of people consolidating all their debt into a single loan, as it’s a quicker and easier way to manage debt.

While rate cuts might be slow, prepare for your mortgage renewal

While no one has a crystal ball that predicts what the future holds, Balgobind expects the BoC to take a cautious approach when it comes to upcoming rate changes.

“To tame down inflation, we’ve seen large rate increases happen incredibly fast,” he says. “But rate cuts will be incredibly slow.”

Thats because if rates do come down quickly, people will be inclined to spend again, leading to the same cycle of overspending and inflation.

Regardless, Balgobind advises homeowners to plan for their upcoming renewal period.

“If your mortgage is coming up for renewal at the end of this year, pay down as much as you can into your mortgage,” he says. “That way you’re paying down your mortgage a little bit quicker with a lower interest rate, as well as preparing for the new, higher rate.”

Most lenders will allow customers to prepay, and paying some amount towards that monthly can also help, he notes. Lastly, he recommends shopping around for lower mortgage rates.

“There are so many fluctuations in the market right now, it’s rapidly evolving, and shopping around is always a smart idea.”


An online survey of 1,536 Canadians (older than 18 years) was completed between January 19 and 21, 2024, using Leger’s online panel. No margin of error can be associated with a non-probability sample (i.e., a web panel in this case). For comparative purposes, though, a probability sample of 1,536 respondents would have a margin error of ±2.5%, 19 times out of 20.

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Engaging a mortgage broker before renewing can help you make a better decision. Mortgage brokers are an excellent source of information for deals specific to your area, contract terms, and their services require no out-of-pocket fees if you are well qualified.

Here at RATESDOTCA, we compare rates from the best Canadian mortgage brokers, major banks and dozens of smaller competitors.

Shaistha Khan

Shaistha Khan is an editor and writer at RATESDOTCA. She is a journalist, writer, and communications specialist with 13 years of experience across the personal finance, business and professional development, oil and gas, and travel and tourism industries. She has worked as a content editor and writer in seven countries, with Canada being the most recent.

She holds a Master of Business Administration degree (MBA) and a diploma in Public Relations and Reputation Management.

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